Competition for P2P Banking Services: Why PayPal?

In the increasingly crowded field of person-to-person payment applications, PayPal continues to work hard to be a bank’s best partner. The company, however, is navigating itself across a tricky landscape these days as it tries to grow its presence off line as well as online.

For banking partners that are trying to maximize their electronic-payment activity and/or enable more online account openings, PayPal might be viewed as both an ally and a competitor to their debit and credit card franchises.

From PayPal’s perspective, it would be pushing into a market of P2P offerings from leading processors such as Fiserv, FIS, and Jack Henry. Yet, gaining market share across traditional financial institutions continues to be a strategic goal of PayPal in an effort to increase transaction volume outside of online sales activity.

From a Bank Systems & Technology article:

But Fridman says that PayPal’s advantages of a global customer base and 14 years of experience in P2P payments will help keep it competitive. And a little competition never hurt anyone, says Arkady: “As competition increases, it just makes everybody better.”

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